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China-Africa investment treaties: do they work?

Over the past 15 years, China’s investments in Africa have increased rapidly and China has become Africa’s largest trading partner. There are continuing misperceptions about China-Africa economic relations, and little empirical evidence on the policy tools that underpin China’s economic diplomacy in Africa and how they affect the conduct of Chinese companies.

China and several sub-Saharan African states have signed bilateral investment treaties. This report explores the content of the treaties, and whether they achieve their stated goal of promoting foreign investment as part of South-South foreign cooperation. It draws on a literature review, a legal analysis of the treaties and interviews with Chinese stakeholders. The findings provide a cautionary tale about whether the treaties fulfill their objective, as well as pointers for follow-on research and for policy and practice in China and Africa.

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International treaties, national laws and transnational contracts define the terms of an investment and influence the distribution of its costs and benefits. To promote inclusive sustainable development, IIED works with partners to rethink these legal documents and the process through which they are formulated.